What is Market Segmentation?
Segmentation means to divide the market place into parts or segments which are definable, actionable and profitable. In other way we can say that, dividing big market place into small parts.
Definitions of Market Segmentation
Market Segmentation is the strategy of dividing markets in order to conquer them.– A Rober
Market Segmentacin is the sub dividing of a market into homogenous sub-sets of customers where any sub set may conceivable be selected on a market target to be reached with a distinct marketing mix”– Philip Kotler
Characteristics of Market Segmentation
Measurable and Obtainable
The size, profile and other relevant characteristics of the segment must be measurable in terms of data. It must be possible to determine the values of the variables used for segmentation with justifiable efforts. This is an important part especially for demographics and geographic variables.
The size and profit potential of the market should be large in term of economically. Because it helps to understand the profit potential of the company. If a segment is small in size then the cost of marketing activities can not be justified.
The segments should be substantial to generate the required returns, that the company has invested in segment. Activities with small segments will give a biased result or negative results.
The segments must be relevant to the organizations objectives. Because if the segments will not same as organizations objectives and resources, then chances of meeting the goal will become less.